Dipo Olowookere
By Dipo Olowookere
The International Monetary Fund (IMF) has said the deadly coronavirus, which has caused prices of crude oil to significantly decline at the market this year, will have a huge negative impact on the economy of Nigeria, the largest in Africa.
At a media briefing in Washington, USA on Thursday, Mr Gerry Rice of the Communications Department of the global lender said this was why a Catastrophe and Containment Trust was set up to provide debt relief to the poorest countries, and the most vulnerable countries hit by catastrophic events.
Business Post reports that the fund could have up to $50 billion for the low income and emerging market member countries of the organisation and already, the United Kingdom has pledged a contribution of £150 million.
Responding to a question from Mr Simon Ateba of Today News Africa during the briefing on the impact of collapse of crude oil on Nigeria, Mr Rice said, “We expect that this will have significant impact, again, on Nigeria as a major oil exporter, and particularly activity in the non-oil sector.”
Speaking further, the IMF representatives said, “So, it’s something that, as this evolves, you know, again just happened this week, we will be looking at any vulnerabilities that this may expose with the Nigerian authorities. We’ll be looking at that very closely in the coming days.”
He further said, “Again, in Nigeria, in other countries, this is all about the response, and well-targeted, proportionate, sizeable measures to strengthen health services and to contain the impact on the economy.”
Commenting on the question about how Africa could benefit from this Catastrophe and Containment Trust, Mr Rice noted that, “This trust is, as I explained earlier, specifically to provide debt relief to the poorest countries, and the most vulnerable countries hit by catastrophic events such as coronavirus, you know, so public health disasters do fall in that category.”
The coronavirus renamed COVID-19 by the World Health Organisation (WHO) and declared a pandemic recently, caused prices of crude oil to hit about $30 per barrel few days ago.
This caused fiscal authorities in Nigeria to press the panic button, suggesting a review of the 2020 budget because the benchmark for crude oil was pegged at $57 per barrel.
President Muhammadu Buhari had to convey a committee to look at the impact of the disease, which has claimed nearly 4,000 lives worldwide and infected over 100,000 persons globally, on the nation’s economy.
Nigeria relies heavily on crude oil to run the economy and with Saudi Arabia and Russia threatening to flood the market with oil after a breakdown in talks to cut supply to help prices, Nigeria began to look for ways to survive.
